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VodkaPundit

Can You Hear Me Now?

April 27th, 2010 - 10:45 am

First iPhone, now Google’s Nexus One — you can’t get either one to work on Verizon.

My theory explaining why the iPhone works only with AT&T is pretty simple: Steve Jobs eliminates SKUs whenever he can. (That’s why I was so surprised when Jobs revealed six different iPad SKUs.) Look at Apple’s entire product lineup: two basic iMacs to configure, exactly one Mac Pro model to upgrade, etc. Sure, there are five different Mac laptops available, but only three screens between them. And while I’m thankful Apple hasn’t stopped making iPod Classics, I’d wager they’re only a year or two from extinction. Once Apple can sell Touch models with 128GB for $250, the Classic will go bye-bye. Because Steve hates SKUs.

iPhones? You have three to choose from, one of which is a discounted model from last year. The other two are differentiated only by how much memory they have on board. And that’s it. It’s not quite “any color you like so long as it’s black,” but close. Last I heard, Apple made an iPhone with a white back, but I’ve never seen one loose in the wild. And to get the iPhone on Verizon would mean a completely new model, because the cellular chipsets behind Verizon’s and AT&T’s networks aren’t at all compatible. Jobs would rather sell fewer phones with fatter margins. Steve hates SKUs.

Take a look at Apple’s power adapters, and all of them, regardless of size, use the exact same slip-on wall plug. Why? So that Jobs needs to make only one set of international adapters, to power everything from iPads to 17″ MacBook Pros. Steve hates SKUs.

There’s a method to Apple’s madness. That wall plug is the nicest one I’ve ever seen, and I’m sure Apple spent more money designing that one tiny part than Dell had in its entire R&D budget for 1997. (I exaggerate, but not by much.) But the longer view is, Apple designed that plug once, years ago, and may never have to update it. And their international adapter kit hasn’t changed in the half decade since I got mine — maybe longer. Amortized costs: Damn near nothin’.

Steve hates SKUs, and passes the savings along to… OK, he just stuffs the savings under Apple’s 42 billion-dollar mattress. Not only does Apple make incredible profits, it does so selling remarkably few products. Steve hates SKUs, but he loves money.

But Google produces exactly –one– physical product for consumers. And a great way to differentiate the Nexus One from the iPhone would be to let Verizon sell it. Everybody loves Verizon, and nobody is fond of AT&T.

So what’s the deal? Well, Nexus One has been a total flop. Google, it must be said, just isn’t a consumer-electronics company. On the other hand, Google’s Android mobile OS has been a huge hit. This morning, AdMob’s tracking revealed that Android users on the web overtook iPhone users for the first time last month.

Best guess: Google isn’t going on Verizon because Google’s getting out of the handheld business, and Verizon doesn’t want to be left holding the bag — a bag full of unsold inventory. Nexus One was an experiment, and not a very happy one. But it looks more and more like Android is becoming the Windows 95 of the Twenty-Tens. And as one of the guys who lined up to buy Win95 at midnight 15 years ago, I see that as a good thing. But if Google becomes the next Microsoft, then maybe that’s not such a good thing.

Meanwhile, I suspect Steve Jobs will continue to eliminate SKUs and generate profits.

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